Merry Christmas, Port Pirie! You are about to receive a $750 million gift.
The Marshall state government and Trafigura, one of the biggest physical commodities trading groups in the world, have unveiled a landmark hydrogen project to be built into the Nyrstar Port Pirie smelter.
The venture is expected to create hundreds of jobs in construction and operation.
The government and Trafigura, owner of Nyrstar, have each committed $2.5 million to Front End Engineering Design to accelerate the investment and jobs boom the project will deliver to the city.
"Since Trafigura became the majority owner of Nyrstar, we have been working together on how they could invest further in South Australia and we are thrilled to unveil this world class project," said Premier Steven Marshall.
"This $750 million project is part of the ongoing transformation of South Australia into a producer of green hydrogen of global significance based on our outstanding renewable energy resources.
"My government has dialed up the state's intention to lead the way by achieving net-100 per cent renewables by 2030 and a 50 per cent cut to emission by 2030.
"Projects like Trafigura's with the support of the SA and federal governments - will help SA to achieve net 500 per cent renewable energy compared to current grid demand by 2050, as detailed in Our Climate Change Action Plan.
"As the biggest metal and second-largest oil trader in the world, Trafigura is the class of company we want investing here. It shows that our Hydrogen Action Plan is working to attract investment."
Stage one would involve an 85-megawatt electrolyser, creating hydrogen and oxygen by splitting water with renewable energy.
The oxygen would be used to supply about 20 per cent of the needs of the smelter and the hydrogen converted to ammonia for export and use by shipping, domestic transport and supporting the Pert Pirie Industrial Precinct.
Stage two would involve a 440-megawatt electrolyser, supplying the entire oxygen needs of the smelter and producing big amounts of ammonia for export while maintaining supply to the domestic market.
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"I am committed to bringing jobs to our region and this project is a great opportunity for the people of Port Pirie and the Upper Spencer Gulf," said Deputy Premier Dan Van Holst Pellekaan who is Energy and Mining Minister and Stuart MP.
"The government's Hydrogen Action Plan will turn our world-class wind and sun resources into clean fuel to run shipping and trucking fleets and power industry here and abroad.
"Our vision is a Renewable Energy Industrial Precinct in the Spencer Gulf - including Port Pirie, Port Augusta, Whyalla and our world-class copper resources, to support jobs for generations to come."
The project would allow other industries to set up at Port Pirie to make use of the available hydrogen and ammonia while improving the competitiveness of the smelter.
"We welcome this commitment from the government to accelerate this project and look forward to working closely with the SA and federal governments to bring this project to reality. It is testament to the Hydrogen Action Plan and the close collaboration we have developed," said Tim Rogers, general manager of Trafigura in Australia.
"By integrating green hydrogen production with the existing smelter and port, paired with South Australia's world-class renewables, we think this project stands out from the pack globally.
"Through Nyrstar, we are committed to the people of Port Pirie and the Upper Spencer Gulf and want to expand our presence and help attract new industries to the region."
The government is accelerating the Front End Engineering and Design for the project with its $2.5m grant from the Jobs and Economic Growth Fund, to speed the project and establish SA as a global leader in large-scale green hydrogen production.
This project joins a list of hydrogen projects in SA, including H2U's Eyre Peninsula Gateway project which has also been accelerated by the government, and Australia's biggest operating green hydrogen facility, AGIG's 1.25MW facility at Tonsley, which is blending hydrogen into the existing gas network in nearby Mitchell Park.
Port Pirie is 30km across the Upper Spencer Gulf from Port Bonython where seven shortlisted parties with projects worth tens of billions of dollars are negotiating land tenure as part of an expression of interest for a hydrogen hub.
Trafigura said the Project would form the cornerstone of a new green hydrogen precinct in Port Pirie to benefit local businesses and support the "decarbonisation" of transport and industry.
The Front End Engineering Design study for the project would start now with a final investment decision to be made by the end of 2022.
If approved, construction would start in 2023 in phases.
It would at first produce 20 tonnes a day (tpd) of green hydrogen for export in the form of green ammonia.
The full-scale plant would produce 100tpd at full capacity from a 440 megawatt electrolyser, enabling it to meet both export and domestic supply needs.
The oxygen created in the production of hydrogen would be used by the smelter.
The project is planned to be integrated into Nyrstar's metals recovery smelter at Port Pirie, using existing infrastructure to accelerate production of green hydrogen compared to developing a project on a new greenfield site.
Trafigura will source 100 per cent renewable energy to provide the electricity needed to run the electrolyser.
This would contribute to "decarbonising" the smelter's power supply.
The company's general manager-Australia, Tim Rogers, said that the business was increasing its global presence in the fast-evolving renewable energy sector and that the project created a unique opportunity for the Spencer Gulf to participate in the growth of a new energy industry, creating the next generation of jobs for local communities.
"We are encouraged by governments' support of the hydrogen industry," he said.
"With both state and federal government support, the project has the potential to be a catalyst for new jobs and economic growth in the region, creating opportunities for existing local businesses to become part of the supply chain, attracting new talent, and encouraging new companies and industries to establish a local presence.
"We expect significant early interest in becoming a part of the green hydrogen precinct with early potential for the region's heavy vehicle transport industry to investigate hydrogen refuelling options.
"In time, it is also expected that Trafigura will work with mining and other energy-intensive industries around the state to explore the opportunities the precinct creates for them to 'decarbonise' through the use of green hydrogen."